EB Daily Market Report - Wednesday, July 24, 2024

DMR Delay

I apologize for the delay in getting this Daily Market Report out. My internet was lost just before the market close on Wednesday and still has not been restored. I'm sending this out to you this morning from my nearby Starbucks.

Upcoming Earnings ChartLists

I provided you the first 3 Upcoming Earnings ChartLists in the Tuesday DMR. Here are the other 2, plus the Upcoming Earnings Relative Strength ChartList. To view, or download these ChartLists into your StockCharts.com account, be sure to use the specific password shown below for each ChartList when prompted:

• Wednesday, 7/24 AMC - Thursday, 7/25 BMO (pw: EARN5833)
• Thursday, 7/25 AMC - Friday, 7/26 BMO (pw: EARN6385)
• Upcoming Earnings Relative Strength (pw: EARNRS5432)

Latest YouTube Video

Yesterday we sent out an email to let you know that a new YouTube video had been uploaded, but failed to provide a link. Simply click on the link below to check out this video:

"Semiconductor Stocks Falling....Potential Recession Ahead?"

Executive Market Summary

• Futures were lower overnight and we saw gap downs across all of our major indices
• Outside of some early strength in small caps (IWM, -1.75%) to briefly turn positive, there has been selling pressure all day
• Growth stocks (IWF, -3.73%) have performed much worst than their value stock (IWD, -0.45%) counterparts
• Technology (XLK, -4.06%), consumer discretionary (XLY, -3.79%), and communication services (XLC, -2.54%) have easily been the worst-performing sectors
• Tesla, Inc. (TSLA, -11.86%) and Alphabet (GOOGL, -5.13%) did not impress Wall Street with their latest quarterly results and are key culprits in today's selloff
• Automobiles ($DJUSAU, -10.02%), semiconductors ($DJUSSC, -5.94%), and internet stocks ($DJUSNS, -5.10%) are the 3 worst-performing industry groups not too surprisingly
• Copper's ($COPPER, -1.79%) continuing plummet is an indictment of the global economy
• Commodities are mixed, as crude oil ($WTIC, +0.73%) tries to slow its recent selloff
• Enphase Energy (ENPH, +12.90%) is bucking the overall selling trend today, leading the S&P 500 components

Market Outlook

Just last Wednesday, I wrote about 4 reasons why we needed to be careful in the very near-term. The first was max pain, the second was the history of the S&P 500 and the fact that the July 17th-24th period was the third worst period of the calendar year, the third and fourth were two sentiment indicators - the Volatility Index ($VIX) and S&P 500 positive correlation, which typically marks reversals, and the 5-day SMA of the equity only put call ratio ($CPCE). The latter had reached .54, which historically has been a rather successful marker of a top. All 4 warned us and here we are, watching one of the biggest selloffs of 2024.

Perhaps the most damaging technical development, at least for now, is the NASDAQ 100's ($NDX) loss of its 50-day SMA:

I've marked 3 possible price support levels that could ultimately hold over the next week, month, or quarter.

Sector/Industry Focus

Semiconductors ($DJUSSC) topped a month ago and are now becoming a major drag on the S&P 500:

My earlier prediction of 16500-17000 as a possible target on this group certainly looks much more likely after today's breakdown. Semiconductors have tremendous impact on both the S&P 500 and NASDAQ, so it'll be difficult to see much further upside in our major indices, unless we see a significant rebound in the semis.

ChartLists/Strategies

I see no need to be a hero and try to catch a bottom. I also don't short secular bull markets. Accordingly, I don't see anything to do here for now.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Wednesday, July 24:

TMO, IBM, NOW, NEE, T, BSX, KLAC, FI, GD, APH, SAN, EQNR, CMG, CME, RSG, ORLY, ROP, F, NEM, EW, URI, GEV, WCN, TEL, ODFL, AMP, OTIS, DB, VRT, LVS, WAB, ICLR, FTV, ROL, TER, TECK, RJF, INVH, TYL, CSL, LII, RCI, CHKP, TDY, ALGN, MOH, IP, GGG, THC, MORN, UHS, RNR, FLEX, LW, IPG, ALLE, CHDN, NLY, KBR, SEIC, SF, CHE, GL, KNX, MSA, BPOP, MTH, TMHC, CLS, RHI, WH, VMI, WHR, PEGA, SLM, MC, ASGN, TSEM, PI, GPI, PTEN, QS, HP, SLAB, PLXS, OII, MXL, HLX, NAVI, PRG, MCRI

Thursday, July 25:

ABBV, AZN, TTE, UNP, UL, HON, RTX, SNY, BTI, NOC, CARR, AJG, PCG, NSC, DLR, VALE, VLO, LYG, LHX, DXCM, KDP, RCL, DOWN, STM, NDAQ, BKR, CBRE, HIG, TSCO, EIX, ARGX, WTW, TW, DOV, ASX, DTE, WST, DECK, WY, ERIE, PFG, CINF, CMS, EME, VRSN, RS, SSNC, LPLA, LUV, MAS, TRU, DOC, RPM, GLPI, TFII, POOL, FTI, LKQ, JNPR, FIX, TXRH, EMN, SKX, APPF, ATR, ORI, MHK, HAS, FCN, WEX, ENSG, SPSC, ALSN, NOV, AAL, LEA, CRS, FSS, DAR, R, COOP, OLN, BYD, LAZ, FCFS, HOG, TPH, ITGR, CNX, AXNX, VC, ROG, UCTT, XRX, NTCT, COUR

Economic Reports

June new home sales: 617,000 (actual) vs. 640,000 (estimate)

July PMI manufacturing: 49.5 (actual) vs. 51.6 (estimate)

July PMI services: 56.0 (actual) vs. 55.0 (estimate)

Happy trading!

Tom